The falling price of oil is causing problems for Hugo Chavez. It’s also going to cause problems soon for our pal Pat Deneen: remember our bet from back in June? Check out this paragraph:
Goldman expects crude to average USD 75 in the fourth quarter and USD 70 at the end of the year, but added: "Should the financial and economic crisis cut deeper into demand, the market could fall as low as USD 50 a barrel."
Oil at 13-month low this morning, just barely above $75 a barrel. Pat--better get your favorite maitre’d on speed-dial.
I don't disagree with you on this issue, but in a limited defense of Deneen, isn't the drop in oil price more to do with economic disaster than changes in supply or reduced consumption based on conservation? If I understand your argument, the steep rise in oil prices would cause more output (so as to take advantage of the higher price) and reduced use. The combination of those to factors will change the supply and demand ratio,
But, in this case it is economic distress that is lowering price. That is a variable that I don't gets to the essential argument with Deneen which over peak oil. The economic downturn could simply be masking the realities of peak oil.
Cogent comments. I think the onset of economic distress is only speeding up what would have naturally occurred. Ironically, this may cause the next cycle of rising oil prices to happen sooner--I see a number of Canadian tar sands projects are suddenly being slowed up because the oil price fall has made them marginally profitable already. If the price had stayed high longer, more new higher cost supply would have come online than might be the case now. OPEC faces a dilemma: they'd like to keep their revenues up, but it is in their interest to lower prices right now to slow up new non-OPEC oil supplies and the development of real energy alternatives here in the U.S. Also, how is Obama going to pay for some of his initiatives with a "windfall profits tax" on oil companies if suddenly there aren't any windfall profits? Stay tuned; this is going to be interesting.
One has to wonder if Chesa Boudin, biological son of Kathy Boudin and David Gilbert (of Weatherman Underground Fame) and raised by Bill Ayers and Bernadine Dohrn (also of the famed Weatherman Underground) will take another look at that WONDERFUL leader Hugo Chavez that Chesa so greatly admires.